- Total revenue of $43.2 million compared to $42.7
million in the prior year quarter.
- GAAP Operating Loss- $59.6 million as compared to $52.1
million in the prior year quarter.
- Adjusted EBITDA increases 71% from the prior year
quarter, while Adjusted EBITDA margin improves to 51% from 30% in
the prior year quarter.
- Signed 191 license deals during 2019, representing $135
million of aggregate guaranteed minimum royalties over the life of
these contracts.
- Improved cost structure of business during the year,
decreasing SG&A cost 20% from prior year quarter and 31%
year-over-year.
Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the
"Company") today reported financial results for the fourth quarter
and full year ended December 31, 2019.
Bob Galvin, CEO commented, “Results for the fourth quarter of
2019 were consistent with management’s expectations, as we continue
to stabilize the business and our operational cost structure.
Our focus on the business and decreasing costs continue to help
improve our Adjusted EBITDA margin. We continue to develop
our pipeline of future business, as we signed 191 deals during 2019
for aggregate guaranteed minimum royalties of approximately $135
million.”
Fourth Quarter & Full Year 2019 Financial Results
GAAP Revenue by Segment(000’s)
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
Licensing
revenue: |
|
|
|
|
|
|
|
|
Women’s |
|
$10,637 |
|
$8,732 |
|
$37,491 |
|
$57,401 |
Men’s |
|
|
11,302 |
|
|
11,321 |
|
|
36,793 |
|
|
39,073 |
Home |
|
|
3,548 |
|
|
4,036 |
|
|
14,753 |
|
|
24,568 |
International |
|
|
17,691 |
|
|
18,616 |
|
|
59,947 |
|
|
66,647 |
|
|
$43,178 |
|
$42,705 |
|
$148,984 |
|
$187,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the fourth quarter of 2019, total revenue was $43.2 million,
a 1% increase, compared to $42.7 million in the fourth quarter of
2018. The 22% increase in revenue in our Women’s segment was
principally as a result of a strong performance in our Danskin and
Rampage brands and the impact of our recent Joe Boxer agreement
with the new Sears. Sales in our home segment declined 12% as a
result of the termination of our direct-to-retail license for our
Royal Velvet brand, partly offset by increases in revenue from our
Charisma brand. Our International segment declined 5% in the fourth
quarter of 2019 primarily as a result of our termination of the
licensee for Umbro in China.
For the twelve months ended December 31, 2019, total
revenue was $149.0 million, a 21% decline, compared to $187.7
million in the twelve months ended December 31, 2018. The
decrease was primarily driven by decreases in our Women’s and Home
segments as a result of the transition of several brands from their
historical direct to retail relationships to non-exclusive
arrangements.
SG&A Expenses:
Total SG&A expenses in the fourth quarter of 2019 were $23.2
million, a 20% decline compared to $29.0 million in the fourth
quarter of 2018. The decline for the quarter was primarily driven
by a decrease in advertising and bad debt expense somewhat offset
by the costs related to previously disclosed ongoing government and
SEC investigations.
Total SG&A expenses in the twelve months ended
December 31, 2019 were $84.0 million, a 31% decline compared
to $121.4 million in the twelve months ended December 31,
2018. Excluding the impact of an $8.2 million bad debt expense as a
result of the Sears bankruptcy filing in 2018, SG&A expenses
decreased 26% year over year.
Trademark, Investment and Asset Impairment:
In the fourth quarter of 2019, the Company recorded a non-cash
trademark impairment charge of $65.6 million, primarily related to
the write-down in the Joe Boxer and Mudd trademarks in the Women’s
segment and Fieldcrest in the Home segment. The Company also
recorded a non-cash investment impairment charge of $9.6 million in
the fourth quarter of 2019 due to impairment of the Company’s
investment in MG Icon, which owns the Material Girl trademark, and
an asset impairment charge of $1.8 million related to the
consolidation and partial sublease of our New York office space. In
the fourth quarter of 2018, the Company recorded a non-cash
trademark impairment charge of $58.7 million, primarily in the
Women’s segment related to the write-down in the Mossimo, Joe Boxer
and Mudd trademarks. The Company also recorded a non-cash
investment impairment charge of $2.5 million in the fourth quarter
of 2018 due to impairment of the Company’s investment in
iBrands.
Operating Income and Adjusted EBITDA (1):
Adjusted EBITDA is a non-GAAP metric, and a reconciliation table
is included below.
Operating loss for the fourth quarter of 2019 was $59.6 million,
as compared to operating loss of $52.1 million for the fourth
quarter of 2018. The fourth quarter 2019 results include
$77.0 million of charges related to trademark impairments,
investment impairment and an asset impairment related to the
downsizing of our New York office, as compared to $61.2 million of
total impairment charges in the prior year quarter. Adjusted EBITDA
in the fourth quarter of 2019 was $21.9 million, which represents
an operating loss of $59.6 million excluding net charges of $81.5
million. Adjusted EBITDA in the fourth quarter of 2018 was
$12.8 million, which represents an operating loss of $52.1 million
excluding net charges of $64.9 million. The change period
over period in Adjusted EBITDA is primarily as a result of reduced
SG&A expenses driven by the Company’s cost reduction
initiative. Refer to footnote 1 below for a full detailed
reconciliation of operating income to Adjusted
EBITDA.
Operating loss for the twelve months ended December 31,
2019 was $30.8 million, as compared to an operating loss of $119.0
million for the twelve months ended December 31, 2018.
Adjusted EBITDA for the twelve months ended December 31, 2019
was $81.5 million, which represents operating loss of $30.8 million
excluding net charges of $112.3 million. Adjusted EBITDA for
the twelve months ended December 31, 2018 was $76.0 million,
which represents an operating loss of $119.0 million excluding net
charges of $195.0 million. The change period over period in
Adjusted EBITDA is primarily as a result of reduced SG&A
expenses driven by the Company’s cost reduction initiative mostly
offset by the reduction in revenue as outlined above. Refer to
footnote 1 below for a full detailed reconciliation of operating
income to Adjusted EBITDA.
Note: All items in the following tables are attributable to the
Company’s interest in its subsidiaries and joint ventures, as
applicable, and exclude the results related to non-controlling
interest. Certain numbers may not add due to rounding.
Adjusted EBITDA by
Segment (1) |
For the Three Months
EndedDecember 31, |
|
|
|
For the Twelve Months
EndedDecember 31, |
|
|
(000's) |
2019 |
|
2018 |
|
% Change |
|
|
|
2019 |
|
2018 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Women's |
$ |
9,139 |
|
$ |
5,041 |
|
81% |
|
|
|
|
$ |
35,493 |
|
$ |
42,723 |
|
-17% |
|
|
|
Men's |
|
4,778 |
|
|
5,940 |
|
-20% |
|
|
|
|
|
15,625 |
|
|
13,876 |
|
13% |
|
|
|
Home |
|
3,081 |
|
|
4,071 |
|
-24% |
|
|
|
|
|
12,871 |
|
|
19,994 |
|
-36% |
|
|
|
International |
|
11,247 |
|
|
4,019 |
|
180% |
|
|
|
|
|
37,566 |
|
|
25,737 |
|
46% |
|
|
|
Corporate |
|
(6,393 |
) |
|
(6,303 |
) |
-1% |
|
|
|
|
|
(20,032 |
) |
|
(26,370 |
) |
24% |
|
|
|
Adjusted
EBITDA |
$ |
21,852 |
|
$ |
12,768 |
|
71% |
|
|
|
|
$ |
81,523 |
|
$ |
75,960 |
|
7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
(2) |
|
51% |
|
|
30% |
|
|
|
|
|
|
|
55% |
|
|
40% |
|
|
|
|
|
Adjusted EBITDA margin in the fourth quarter of 2019 was 51% as
compared to Adjusted EBITDA margin in the fourth quarter of 2018 of
30%. The change period over period in Adjusted EBITDA margin
is primarily as a result of the Company’s decrease in
expenses.
Adjusted EBITDA margin in the twelve months ended
December 31, 2019 was 55% as compared to Adjusted EBITDA
margin in the twelve months ended December 31, 2018 of
40%. The change period over period in Adjusted EBITDA margin
is primarily as a result of reduced SG&A expenses driven by the
Company’s cost reduction initiative.
Interest Expense and Other (Income) Loss,
net:
Interest expense in the fourth quarter of 2019 was $13.9 million
as compared to $14.9 million in the fourth quarter of 2018.
In the fourth quarter of 2019, Other (income) loss was a $12.1
million loss as compared to a $7.3 million gain in the fourth
quarter of 2018. This gain or loss results primarily from the
Company's accounting for the 5.75% Convertible Notes, which
requires recording the fair value of this debt at the end of each
period with any change from the prior period accounted for as other
income or loss in the respective period's income statement.
Interest expense in the twelve months ended December 31,
2019 was $57.3 million as compared to $59.2 million in the twelve
months ended December 31, 2018. For Other (Income) Loss, net
for the twelve months ended December 31, 2019, the Company
recognized a $5.3 million loss as compared to a $91.3 million gain
in the prior year period. This gain or loss results primarily from
the Company’s accounting for the 5.75% Convertible Notes, which
requires recording the fair value of this debt at the end of each
period with any change from the prior period accounted for as other
income or loss in the respective periods income statement.
Provision for Income Taxes:
The effective income tax rate for the fourth quarter of 2019 is
approximately -8.0%, which resulted in a $6.8 million income tax
provision, as compared to an effective income tax rate of -11.1% in
the fourth quarter of 2018, which resulted in a $6.7 million income
tax provision. The effective tax rate for the three months
ended December 31, 2019 remains consistent as compared to the three
months ended December 31, 2018 primarily due to foreign withholding
tax incurred on foreign sourced revenue, which remain consistent
quarter-over-quarter.
The effective income tax rate for the twelve months ended
December 31, 2019 is approximately -8.6%, which resulted in a
$8.1 million income tax provision, as compared to an effective
income tax rate of -7.9% in the twelve months ended
December 31, 2018, which resulted in a $6.5 million income tax
provision. The effective tax rate for the twelve months ended
December 31, 2019 remains consistent as compared to the twelve
months ended December 31, 2018 primarily due to foreign withholding
tax incurred on foreign sourced revenue, which remain consistent
year-over-year.
GAAP Net Income and GAAP Diluted EPS:
GAAP net income attributable to Iconix for the fourth quarter of
2019 reflected a loss of $95.0 million, compared to a loss of $69.1
million for the fourth quarter of 2018. GAAP diluted EPS for the
fourth quarter of 2019 reflected a loss of $8.11, compared to a
loss of $9.04 for the fourth quarter of 2018.
GAAP net income attributable to Iconix for the twelve months
ended December 31, 2019 reflected a loss of $111.5 million,
compared to a loss of $100.5 million for the twelve months ended
December 31, 2018. GAAP diluted EPS for the twelve
months ended December 31, 2019 reflected a loss of $10.56
compared to a loss of $14.93 for the twelve months ended
December 31, 2018.
Adjusted EBITDA (1):
Adjusted EBITDA for the fourth quarter of 2019 was $21.9
million, compared to $12.8 million for the fourth quarter of
2018. Adjusted EBITDA for the twelve months ended
December 31, 2019 was $81.5 million, compared to $76.0 million
for the twelve months ended December 31, 2018.
Adjusted EBITDA:
(1) |
|
|
|
|
(000's) |
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
December 31, |
|
|
|
2019 |
|
|
2018 |
|
% Change |
|
|
|
|
|
|
GAAP Operating Income
(Loss) |
$(59,636) |
|
$(52,092) |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
stock-based compensation |
|
209 |
|
|
(2,297) |
|
|
|
depreciation and amortization |
|
423 |
|
|
540 |
|
|
|
loss on termination of licenses |
|
— |
|
|
4,900 |
|
|
|
contract asset impairment charges |
|
136 |
|
|
889 |
|
|
|
trademark, goodwill, investment and asset impairment charges |
|
76,966 |
|
|
61,195 |
|
|
|
special charges |
|
4,805 |
|
|
1,859 |
|
|
|
non-controlling interest |
|
(2,580) |
|
|
(2,217) |
|
|
|
non-controlling interest related to depreciation, amortization and
trademark impairment |
|
1,529 |
|
|
(9) |
|
|
|
|
|
81,488 |
|
|
64,860 |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$21,852 |
|
$12,768 |
|
71% |
|
|
Adjusted EBITDA Margin
(2) |
|
51% |
|
|
30% |
|
|
|
|
|
|
|
|
Adjusted EBITDA:
(1) |
|
|
|
|
(000's) |
|
|
|
|
|
|
|
|
|
|
For the Twelve Months Ended
December 31, |
|
|
|
2019 |
|
|
2018 |
|
% Change |
|
|
|
|
|
|
GAAP Operating Income
(Loss) |
$(30,780) |
|
$(119,037) |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
stock-based compensation |
|
971 |
|
|
(2,405) |
|
|
|
depreciation and amortization |
|
1,816 |
|
|
2,329 |
|
|
|
costs associated with debt financings |
|
— |
|
|
8,344 |
|
|
|
loss on termination of licenses |
|
— |
|
|
10,550 |
|
|
|
contract asset impairment charges |
|
3,769 |
|
|
1,294 |
|
|
|
trademark, goodwill, investment and asset impairment charges |
|
93,966 |
|
|
176,729 |
|
|
|
special charges |
|
19,868 |
|
|
9,040 |
|
|
|
non-controlling interest |
|
(9,597) |
|
|
(10,852) |
|
|
|
non-controlling interest related to depreciation, amortization and
trademark impairment |
|
1,510 |
|
|
(32) |
|
|
|
|
|
112,303 |
|
|
194,997 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$81,523 |
|
$75,960 |
|
7% |
|
|
Adjusted EBITDA Margin
(2) |
|
55% |
|
|
40% |
|
|
|
|
|
|
|
|
Balance Sheet and Liquidity:
(000's) |
December 31, 2019 |
|
December 31, 2018 |
|
Cash
Summary: |
|
|
|
|
Unrestricted Domestic, Canada
and China (Wholly Owned) |
$29,144 |
|
$45,936 |
|
Unrestricted Luxembourg (Wholly Owned) |
|
17,023 |
|
|
12,213 |
|
Unrestricted in consolidated
JV's |
|
9,298 |
|
|
8,460 |
|
Restricted Cash |
|
15,946 |
|
|
16,026 |
|
|
|
|
|
|
Total Cash |
$71,411 |
|
$82,635 |
|
|
|
|
|
|
Debt
Summary: |
|
|
|
|
Senior Secured Notes due
January 2043* |
$338,130 |
|
$365,481 |
|
Variable Funding Note due
January 2043 |
|
100,000 |
|
|
100,000 |
|
5.75% Convertible Notes due
August 2023 |
|
94,430 |
|
|
109,715 |
|
Senior Secured Term Loan due
August 2022 |
|
175,600 |
|
|
189,421 |
|
|
|
|
|
|
Total Debt (Face Value) |
$708,160 |
|
$764,617 |
|
|
|
|
|
|
*- The Company’s
Senior Secured Notes include a test that measures the amount of
principal and interest required to be paid on the debt to the
approximate cash flow available to pay such principal and interest;
the test is referred to as the debt service coverage ratio
(“DSCR”). As a result of a decline in royalty collections
during the twelve months ended March 31, 2019, the DSCR fell below
1.10x as of March 31, 2019. Beginning April 1, 2019, the Senior
Secured Notes are in a Rapid Amortization Event pursuant to the
Securitization Notes Indenture. In rapid amortization, the
residual will immediately be used to pay down the principal.
Iconix will continue to receive its management fee from the
Securitization Notes and the Company does not believe the loss of
our residual, if any, will have a significant impact on our
operations. |
|
Fiscal 2020 Outlook
Due to the impact that COVID-19 is having across the globe, and
the rapid and continuous economic developments, we are not
providing guidance for fiscal 2020 at this time. The impact of
COVID-19 on our business could be material to our operating
results, cash flows and financial condition. Due to the evolving
and uncertain nature of this situation, we are not able to estimate
the full extent of the impact on Iconix’s operating results, cash
flows and financial condition. We will provide additional updates
as the situation warrants.
Iconix Brand Group, Inc. owns, licenses and markets a portfolio
of consumer brands including: CANDIE'S ®, BONGO ®, JOE
BOXER ®, RAMPAGE ®, MUDD ®, MOSSIMO ®, LONDON
FOG ®, OCEAN PACIFIC ®, DANSKIN ®, ROCAWEAR ®,
CANNON ®, ROYAL VELVET ®, FIELDCREST ®,
CHARISMA ®, STARTER ®, WAVERLY ®, ZOO YORK ®,
UMBRO ®, LEE COOPER ®, ECKO UNLTD. ®, MARC
ECKO ®, ARTFUL DODGER ®, and HYDRAULIC®. In addition,
Iconix owns interests in the MATERIAL GIRL ®, ED HARDY ®,
TRUTH OR DARE ®, MODERN AMUSEMENT ®, BUFFALO ® and
PONY ® brands. The Company licenses its brands to a network of
retailers and manufacturers. Through its in-house business
development, merchandising, advertising and public relations
departments, Iconix manages its brands to drive greater consumer
awareness and brand loyalty.
Forward-Looking Statements
In addition to historical information, this press release
contains forward-looking statements within the meaning of the
federal securities laws. Such forward-looking statements include
projections regarding the Company's beliefs and expectations about
future performance and, in some cases, may be identified by words
like "anticipate," "assume," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "plan," "potential,"
"predict," "project," "future," "will," "seek" and similar terms or
phrases. These statements are based on the Company's beliefs and
assumptions, which in turn are based on information available as of
the date of this press release. Forward-looking statements involve
known and unknown risks and uncertainties, which could cause actual
results to differ materially from those contained in any
forward-looking statement and could harm the Company's business,
prospects, results of operations, liquidity and financial condition
and cause its stock price to decline significantly. Many of these
factors are beyond the Company's ability to control or predict.
Important factors that could cause the Company's actual results to
differ materially from those indicated in the forward-looking
statements include, among others: the ability of the Company's
licensees to maintain their license agreements or to produce and
market products bearing the Company's brand names, the Company's
ability to retain and negotiate favorable licenses, the Company's
ability to meet its outstanding debt obligations, the impact of
novel coronavirus on global production, manufacturing, distribution
and sales and the events and risks referenced in the sections
titled "Risk Factors" in the Company's Annual Report on
Form 10‑K for the year ended December 31, 2018 and
subsequent Quarterly Reports on Form 10-Q and in other
documents filed or furnished with the Securities and Exchange
Commission. Our forward-looking statements do not reflect the
potential impact of any acquisitions, mergers, dispositions,
business development transactions, joint ventures or investments we
may enter into or make in the future. Given these uncertainties,
you should not place undue reliance on these forward-looking
statements. These forward-looking statements are made only as of
the date hereof and the Company undertakes no obligation to update
or revise publicly any forward-looking statements, except as
required by law.
Media contact: John T. McClain Executive Vice President and
Chief Financial Officer Iconix Brand Group, Inc.
jmcclain@iconixbrand.com 212-730-0030
Unaudited Consolidated Statement of
Operations(000’s, except earnings per share data)
|
Three MonthsEnded |
|
|
Three MonthsEnded |
|
|
YearEnded |
|
|
YearEnded |
|
|
December 31,2019 |
|
|
December 31,2018 |
|
|
December 31,2019 |
|
|
December 31,2018 |
|
Licensing revenue |
$ |
43,178 |
|
|
$ |
42,705 |
|
|
$ |
148,984 |
|
|
$ |
187,689 |
|
Selling, general and
administrative expenses |
|
23,150 |
|
|
|
28,992 |
|
|
|
83,996 |
|
|
|
121,429 |
|
Loss on termination of
licenses |
|
— |
|
|
|
4,900 |
|
|
|
— |
|
|
|
10,550 |
|
Depreciation and
amortization |
|
422 |
|
|
|
540 |
|
|
|
1,816 |
|
|
|
2,329 |
|
Equity (earnings) loss on
joint ventures |
|
2,276 |
|
|
|
(831 |
) |
|
|
(14 |
) |
|
|
(3,043 |
) |
Gains on sale of trademarks,
net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,268 |
) |
Asset impairment |
|
1,766 |
|
|
|
— |
|
|
|
1,766 |
|
|
|
— |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
37,812 |
|
Trademark impairment |
|
65,587 |
|
|
|
58,696 |
|
|
|
65,587 |
|
|
|
136,417 |
|
Investment impairment |
|
9,613 |
|
|
|
2,500 |
|
|
|
26,613 |
|
|
|
2,500 |
|
Operating income (loss) |
|
(59,636 |
) |
|
|
(52,092 |
) |
|
|
(30,780 |
) |
|
|
(119,037 |
) |
Other expenses (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
13,864 |
|
|
|
14,895 |
|
|
|
57,264 |
|
|
|
59,214 |
|
Interest income |
|
(102 |
) |
|
|
(190 |
) |
|
|
(360 |
) |
|
|
(495 |
) |
Other (income) loss, net |
|
12,116 |
|
|
|
(7,304 |
) |
|
|
5,291 |
|
|
|
(91,305 |
) |
Gain on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,473 |
) |
Foreign currency translation loss |
|
98 |
|
|
|
700 |
|
|
|
858 |
|
|
|
1,153 |
|
Other expenses (income) – net |
|
25,976 |
|
|
|
8,101 |
|
|
|
63,053 |
|
|
|
(35,906 |
) |
Income (loss) before income
taxes |
|
(85,612 |
) |
|
|
(60,193 |
) |
|
|
(93,833 |
) |
|
|
(83,131 |
) |
Provision for income
taxes |
|
6,829 |
|
|
|
6,666 |
|
|
|
8,083 |
|
|
|
6,538 |
|
Net loss |
|
(92,441 |
) |
|
|
(66,859 |
) |
|
|
(101,916 |
) |
|
|
(89,669 |
) |
Less: Net income attributable
to non-controlling interest |
|
2,579 |
|
|
|
2,218 |
|
|
|
9,597 |
|
|
|
10,852 |
|
Net loss attributable to
Iconix Brand Group, Inc. |
$ |
(95,020 |
) |
|
$ |
(69,077 |
) |
|
$ |
(111,513 |
) |
|
$ |
(100,521 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(8.11 |
) |
|
$ |
(9.04 |
) |
|
$ |
(10.56 |
) |
|
$ |
(14.93 |
) |
Diluted |
$ |
(8.11 |
) |
|
$ |
(9.04 |
) |
|
$ |
(10.56 |
) |
|
$ |
(14.93 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
11,716 |
|
|
|
7,642 |
|
|
|
10,559 |
|
|
|
6,734 |
|
Diluted |
|
11,716 |
|
|
|
7,642 |
|
|
|
10,559 |
|
|
|
6,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
(1) Adjusted EBITDA is a non-GAAP financial measure, which
represents operating income excluding stock-based compensation
(benefit) expense, depreciation and amortization, impairment
charges, costs associated with recent financings, special charges
related to potential settlement and professional fees incurred as a
result of cooperation with the Staff of the SEC, the SEC and
related SDNY investigations, internal investigations, the
previously disclosed class action and derivative litigations, costs
related to the transition of Iconix management, but including gains
on sales of trademarks and non-controlling interest. The Company
believes Adjusted EBITDA is a useful financial measure in
evaluating its financial condition because it is more reflective of
the Company's business purpose, operations and cash expenses.
Uses of cash flows that are not reflected in Adjusted EBITDA
include interest payments and debt principal repayments, which can
be significant. As a result, Adjusted EBITDA should not be
considered as a measure of our liquidity. Other companies
that provide Adjusted EBITDA information may calculate EBITDA and
Adjusted EBITDA differently than we do. The definition of Adjusted
EBITDA may not be the same as the definitions used in any of our
debt agreements.
Adjusted EBITDA Reconciliation for the
Three Months Ended
December 31,
(1): |
|
GAAPOperatingIncome |
|
ImpairmentCharges |
|
Special Charges |
|
Loss on Terminationof
Licenses |
|
Depreciation&Amortization |
|
Stock Compensation |
|
Contract Asset Impairment |
|
Non-controllingInterest, net |
|
AdjustedEBITDA |
($, 000s) |
2019 |
|
2018 |
|
|
2019 |
2018 |
|
2019 |
2018 |
|
2019 |
2018 |
|
2019 |
2018 |
|
2019 |
2018 |
|
|
2019 |
2018 |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
Women's |
(27,198 |
) |
(50,217 |
) |
|
35,281 |
55,059 |
|
- |
- |
|
- |
- |
|
- |
- |
|
- |
(9 |
) |
|
- |
208 |
|
1,056 |
|
- |
|
|
9,139 |
|
5,041 |
|
Men's |
7,103 |
|
3,361 |
|
|
872 |
131 |
|
- |
- |
|
- |
4,900 |
|
13 |
13 |
|
- |
- |
|
|
- |
189 |
|
(3,210 |
) |
(2,654 |
) |
|
4,778 |
|
5,940 |
|
Home |
(14,709 |
) |
1,334 |
|
|
17,789 |
2,719 |
|
- |
- |
|
- |
- |
|
- |
- |
|
1 |
7 |
|
|
- |
11 |
|
- |
|
- |
|
|
3,081 |
|
4,071 |
|
International |
(1,944 |
) |
3,690 |
|
|
11,645 |
786 |
|
- |
- |
|
- |
- |
|
71 |
105 |
|
3 |
(17 |
) |
|
136 |
481 |
|
1,336 |
|
(1,026 |
) |
|
11,247 |
|
4,019 |
|
Corporate |
(22,888 |
) |
(10,260 |
) |
|
11,379 |
2,500 |
|
4,805 |
1,859 |
|
- |
- |
|
339 |
422 |
|
205 |
(2,278 |
) |
|
- |
- |
|
(233 |
) |
1,454 |
|
|
(6,393 |
) |
(6,303 |
) |
Total
Income |
(59,636 |
) |
(52,092 |
) |
|
76,966 |
61,195 |
|
4,805 |
1,859 |
|
- |
4,900 |
|
423 |
540 |
|
209 |
(2,297 |
) |
|
136 |
889 |
|
(1,051 |
) |
(2,226 |
) |
|
21,852 |
|
12,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation for the
Twelve Months Ended
December 31,
(1): |
|
|
GAAP Operating Income |
|
Impairment Charges |
|
Special Charges |
|
Costs associated with debt financings |
|
Loss on Terminationof
Licenses |
|
Depreciation & Amortization |
|
Stock Compensation |
|
Contract Asset Impairment |
|
Non-controlling Interest, net |
|
Adjusted EBITDA |
($, 000s) |
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
2018 |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
Women's |
(961 |
) |
(128,050 |
) |
|
35,281 |
|
170,593 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
|
75 |
|
|
117 |
|
222 |
|
1,056 |
|
(117 |
) |
|
35,493 |
|
42,723 |
|
Men's |
24,878 |
|
11,754 |
|
|
872 |
|
131 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
10,550 |
|
50 |
90 |
|
- |
|
- |
|
|
(144 |
) |
275 |
|
(10,031 |
) |
(8,924 |
) |
|
15,625 |
|
13,876 |
|
Home |
(4,932 |
) |
17,221 |
|
|
17,789 |
|
2,719 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
- |
|
6 |
|
30 |
|
|
8 |
|
24 |
|
- |
|
- |
|
|
12,871 |
|
19,994 |
|
International |
23,487 |
|
27,447 |
|
|
11,645 |
|
786 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
300 |
460 |
|
14 |
|
213 |
|
|
3,788 |
|
773 |
|
(1,668 |
) |
(3,942 |
) |
|
37,566 |
|
25,737 |
|
Corporate |
(73,252 |
) |
(47,409 |
) |
|
28,379 |
|
2,500 |
|
19,868 |
|
9,040 |
|
- |
|
8,344 |
|
- |
|
- |
|
1,466 |
1,779 |
|
951 |
|
(2,723 |
) |
|
- |
|
- |
|
2,556 |
|
2,099 |
|
|
(20,032 |
) |
(26,370 |
) |
Total
Income |
(30,780 |
) |
(119,037 |
) |
|
93,966 |
|
176,729 |
|
19,868 |
|
9,040 |
|
- |
|
8,344 |
|
- |
|
10,550 |
|
1,816 |
2,329 |
|
971 |
|
(2,405 |
) |
|
3,769 |
|
1,294 |
|
(8,087 |
) |
(10,884 |
) |
|
81,523 |
|
75,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Adjusted EBITDA margin is a non-GAAP financial measure,
which represents Adjusted EBITDA as a percentage of revenue.
The Company believes Adjusted EBITDA margin is a useful financial
measure in evaluating its financial condition because it is more
reflective of the Company's business purpose, operations and cash
expenses. Uses of cash flows that are not reflected in
Adjusted EBITDA margin include interest payments and debt principal
repayments, which can be significant. As a result, Adjusted
EBITDA margin should not be considered as a measure of our
liquidity. Other companies that provide Adjusted EBITDA
margin information may calculate EBITDA margin and Adjusted EBITDA
margin differently than we do. The definition of Adjusted EBITDA
margin may not be the same as the definitions used in any of our
debt agreements.
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